Education Credits and Deduction

There are various tax credits for post-secondary education expenses. The American Opportunity Credit is available to taxpayers who incur tuition expenses for the first 4 years of qualified post-secondary education for themselves, their spouse, or their dependents. The credit is equal to 100% of the first $2,000 of qualified expenses and 25% of the next $2,000 for a maximum credit of $2,500. For tuition paid beyond the first 4 years, taxpayers may qualify for the Lifetime Learning Credit, which is 20% of the first $10,000 of qualified expenses for a maximum credit of $2,000. There is also an above-the-line deduction for post-secondary education expenses available for a maximum deduction of $4,000. All of these tax benefits are subject to income limitations.

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